Sunday, October 07, 2007

Reading the anger at Cygnus

A week ago today I wrote the first of two blog posts about the trouble at Cygnus. The reaction -- in the form of comments I published, comments I censored (because they contained anonymous personal attacks), and e-mails I received -- was both shocking and informative. I warned a week ago today that Cygnus' plan to cut wages was ill-advised and that it "isn't going to end well."If anything, I was probably being too optimistic. It's beginning to look like this could end in disaster.Take a moment to look at those earlier posts here and here. More importantly, read the comments. Because today I want to talk about those comments and what they mean.

How bad is it?As you read through the comments you'll see a level of fury and distrust that is nothing short of overwhelming. The staff at Cygnus is furious. In addition to the sheer anger, there are a few other things worth noting in the comments.Consider that:1. The staff's outrage at actual events is so intense it may be leading to outrage at imagined events. One comment refers to a company-paid trip earlier this year to Hawaii for "publishers, sales people, and their spouses/significant others." But another comment says no such trip took place.2. The atmosphere at the company is now so poisonous that even when management is making sense, the staff doesn't hear it. In one comment, a staff member is angry that the co-CEOs had earlier said that "We anticipate interactive budgets to EQUAL print budgets within 2 years."The person posting the comments calls that projection "unrealistic" and "nonsense." But it's neither. I don't know if the co-CEOs were talking about their clients' advertising budgets or if they were taking about Cygnus' internal budgets. But either way, interactive budgets already exceed print budgets in much of B2B. But at this point it seems likely that the staff is unable to hear even when senior management is making sense.3. As things were deteriorating at Cygnus, it appears that senior management continued to give editors new duties (making "on-site reader calls," whatever those are), and then misleading the staff -- suggesting that the new work could lead to pay raises.4. There are no indications in the comments (or in the emails I've traded with Cygnus workers) to suggest that the company's human resources department has been briefed fully on the salary cuts. Workers say they can't get straight answers even to simple questions. (Note: a staff meeting has been scheduled for this week, and it's likely that many questions will be answered then.)5. No senior or mid-management people have stepped forward to defend the company's actions. Not one person. Not a single one. That speaks volumes.

Irreconcilable differences?At Cygnus, the employees and executives are not working together. Rather, they are separated by a monstrous divide of contempt and distrust.As far as I have heard, no one among the workers or middle management believes that the salary cuts and related actions can work. No one, it seems, has any faith that senior management can pull this off. No one appears to believe that Cygnus will be OK.Only the workers at Cygnus know for sure just how ugly things have become. Only they know how much less work is being done, how much less effort is being made.The question is what, if anything, can be done to turn things around.

No doubt the co-CEOs and other top brass at Cygnus arrived at the decision to cut wages because they believed the environment demanded drastic action. Perhaps they were right. Perhaps not. Only those people who have seen the company's books and debt agreements know for sure.But I have no doubt that as drastic as the situation might have been, it would have been a wiser move to take a different drastic action. Cutting wages for every worker in the company is not a recipe for saving a company. It's an invitation to low morale, sabotage and an exodus of your key players.

If Cygnus' senior management is reading this, allow me to suggest the following:Now is the time for drastic action. You have to do something to win back your staff and you have to do it quickly.Because when I read the comments and emails of this past week it is clear to me that Cygnus is slipping away.

(For another take on this, check out this post by Prescott Shibles, the smartest guy who ever worked for me. Prescott talks about how his morale was crushed years ago when the company we both worked for stared cutting wages for execs and freezing salaries for everyone else. That company -- or at least the unit we worked for -- survived and thrived. And Prescott has too. However, it's worth noting that new investors and a very different sort of CEO led the company back from the depths.)

13 comments:

Actually, management didn't mislead regarding the editor reader-call mandate. They didn't say they WOULD give you a pay raise if you did your reader calls by Sept. 1. They simply threatened (and that did feel like the tone of the original e-mail regarding this) that you would NOT get a pay raise if you FAILED to complete the task. Of course, inferences being what they are, you assumed that if you completed this task AND your other work was exemplary, that you would receive some sort of compensation for your efforts all year. So I guess Cygnus gets by on a technical loophole on this one...

I stand by my earlier comment I posted about "unrealistic expectations" concerning print and interactive budgets.

Mr. Conley, Do you honestly think that every advertiser in every Cygnus publication would allocate an equal amount of interactive (internet ads, email blasts...anything not print oriented) advertising dollars on top of what they spend yearly, on print advertising in just 2 years??? Do you know that economy is struggling?

Cygnus is expecting to double their profits in just 2 years. That is UNREALISTIC and GREEDY!!! It puts serious doubt as to the sanity of the CEOs and management.

I will agree with you in the fact that this wage reduction fiasco will lead to an exodus of enormous proportions in the coming months.

I would love to get your reaction to my post as to why you think Cygnus's goals were realistic!

Anonymous,Re: print vs. advertising budgets.You ask if I "honestly think that every advertiser in every Cygnus publication would allocate an equal amount of interactive (internet ads, email blasts...anything not print oriented) advertising dollars on top of what they spend yearly, on print advertising in just 2 years?"You also suggest that management's claim that print and interactive budgets will become equal means the company "is expecting to double their profits in just 2 years."I think the reason we're having a difficult time agreeing here is because of your assumptions and some misunderstanding about terminology.First, what I've seen time and time again at B2B publications that boost their online productivity is the arrival of NEW advertisers. In fact, I've never seen a publication that failed to attract a different audience and a different advertising base on the Web. More importantly, I see little indication that any B2B advertisers are doubling their ad spend by adding $1 of expense online for every $1 spent in print. What I do see is B2B ad spending shifting from print to online. I don't expect Cygnus advertisers to increase their total spend. I expect them to CUT print spending and INCREASE online spending.Second, Internet ad spending doesn't need to double for the co-CEOs projections to come true. And I tend to doubt that's what they are predicting. Rather, as print ad revenue falls, the two items move toward equal. The faster that online revenue rises, the more quickly this will happen. But in reality, all that is needed is for print advertising to continue to decline. And it most certainly will.Third, and most important, I don't believe the co-CEOs have predicted anything like a doubling in PROFIT. Heck, I don't think they've even predicted a doubling in EBITDA or revenue. Rather, they are projecting that budgets for online and print will even out within two years. That doesn't require profit to double. It doesn't require anything to double. It only requires that the two numbers (online and print budgets) reach the same level. That can happen by a decline in print. That can happen by a rise in online. But it is most likely to happen by a combination of the two. And no matter how it happens, it likely will happen within two years, just as it is happening across B2B.For more on this, take a look at this post from Colin Crawford earlier this year. IDG's arrival at this "tipping point" is widely seen as the direction that all of B2B is moving toward:http://tinyurl.com/yvcoja

Okay, here's another Cygnus employee ready to post an unpopular comment - namely, the executive team at Cygnus is doing what matters.

Today, one of the CEOs stood before an unfiltered group of employees and took every question they had to ask about executive actions and vision for over two hours - answering each question honestly and accurately.

He spoke with the openness usually reserved for Friday-night family dinners.

What thanks, for the type of approachability seldom demonstrated by CEOs today? Having these family-discussion comments recorded and released to the world, rather than debated face-to-face in the forum that was willingly made available to all.

Let's get serious. That's the childish behavior of a teenager.

So if you want to debate the decisions required by the adult world, stop acting like children.

The true demonstration of the dedication to the Cygnus team? There will be a second open forum discussion this week, more easily recorded by those outside, to ensure each person in the company has their opportunity to pose their questions, and not allowing the actions of others to abrograte that right.

The true demonstration of dedication to the Cygnus cause? Keep it in the family, do what it takes to get through this transition together, and take advantage of a hand honestly offered.

If it isn't the Ceo's mistake, who's blunder is it?the President's or the VP's?Obviously someone screwed the pooch here, I'm sure even you would agree. How is it that it took 10 days for the brass to step up and answer questions? Why is it that no one from senior management wanted to deal with this, but they chose to send their publishers out to deliver the news, and not in writing (some of us found out about the memo by way of folio)? I can actually agree, the CEO's are making decisions based on the information they get...well they ought to be able to see that the team in place has failed them miserably, one could conclude that they fired the wrong VP's, no??

I really do hope things will settle down, and CYGNUS can go back to being a good company that we can all take pride in. We once had a president here that took pride in the culture of this company, certainly something that is missing right now. Positive energy, or a simple "Thank You" goes a long way, and it HAS to start at the top.

"Okay, here's another Cygnus employee ready to post an unpopular comment - namely, the executive team at Cygnus is doing what matters."

While you certainly have the right to feel however you wish, I'll be honest…I suspect you of being a member of the upper-management team, posting your comments to create the illusion that the dissenters are a limited group and that others are fine with the company's decision. That is just not the case.

"Today, one of the CEOs stood before an unfiltered group of employees and took every question they had to ask about executive actions and vision for over two hours - answering each question honestly and accurately."

Not really, no. Many answers were evasive and said little, and the bottom line is that it was only done because it had to be done. The public outcry over the past two weeks has been huge, and they couldn't sit silently and ignore it anymore. It was becoming a public relations nightmare (still is), and they had to put on the veneer of acting like they were concerned for employee morale. If they were, they'd have found another solution, they wouldn't have taken nearly two weeks to address employee concerns, they wouldn't have waited until their backs were against the wall, and they would have made sure the management and personnel staff had their stories straight when answering questions.

"He spoke with the openness usually reserved for Friday-night family dinners."

Oh, come ON. He did what had to be done from a PR standpoint, because the masses were letting the public know what a rotten thing he'd done. Portraying him as some sort of benevolent father-figure to the company is absolutely absurd, and only a member of the upper management would try to assert it isn't.

"What thanks, for the type of approachability seldom demonstrated by CEOs today? Having these family-discussion comments recorded and released to the world, rather than debated face-to-face in the forum that was willingly made available to all."

They're not family discussions. They're upper-management attempts to assuage an angry staff, and that staff has every right to air its anger publicly, just as you have the right to disagree.

"Let's get serious. That's the childish behavior of a teenager."

Not quite. The comments have been fair, frank and accurate, and the near-complete lack of dissenting voices shows that very few people disagree with their having been posted.

"So if you want to debate the decisions required by the adult world, stop acting like children."

No one here is acting like a child. That's a ridiculous assertion to make. People are rightly pointing out how they've been wronged since the management seems to have no interest in fixing the problem to their satisfaction.

"The true demonstration of the dedication to the Cygnus team? There will be a second open forum discussion this week, more easily recorded by those outside, to ensure each person in the company has their opportunity to pose their questions, and not allowing the actions of others to abrograte that right."

Who's abrogating anyone's right to pose any questions? Certainly not those posting blog comments and recording meetings. Quite the opposite, actually.

"The true demonstration of dedication to the Cygnus cause? Keep it in the family, do what it takes to get through this transition together, and take advantage of a hand honestly offered."

This isn't a family. It's a company, and those working for it are not children. In one breath, you claim the discontented (read: the vast, vast majority of the staff) are acting like children for complaining…and in the next, you portray the owners as father-figures and the staff as their loyal kids. The very notion is ridiculous, and it really calls into question your motives for posting what you did.

To the person who called all the unhappy Cygnus employees childish, there's nothing more childish than name-calling. And there's nothing more disingenuous than a member of a company's management staff posing as an employee in order to rebut complaints behind a disguise without having to actually face the music as an executive...and as an adult.

It gets even more ridiculous over here. Last week, the company sent out a memo saying people could wear jeans for a week if they donated money to a charity fund.

Now, the charity is absolutely worthwhile, and I certainly hope people contribute to it, just as I plan to do (I'll leave out the details of the fund, our of sensitivity to the family of the unfortunate person involved). I want to make that clear so no one thinks otherwise.

But the company's memo is wrong on several levels: (1) It singles out those prefering not to contribute (which is, after all, their right) by forcing them to wear dress clothes while others are wearing jeans, thus making them seem as if they don't care (a scarlet letter, so to speak). (2) The management doesn't consistently enforce the supposed dress code anyway, as one member of the upper management showed up to the recently publicized meeting dressed as though she were going out partying rather than working. (3) Cutting a person's salary, then telling them they must wear nice clothes, just adds insult to injury--if the company wants employees to have money for nice clothing, it shouldn't cut their already-below-industry-standard salaries. (4) Dangling the wearing of jeans before employees as some kind of consolation prize just rams in further the knife already lodged in our backs by the salary cut.

Does the company REALLY think the employees can be that easily distracted by such an obvious Roman "bread and circuses" tactic? And does it really think we give a damn about the dress code anyway, after having our money taken from us?

Given all that Cygnus has recently done to its employees, it should have simply made a donation itself, encouraged others to do the same, and kept the dress code entirely separate from the voluntary donation of money. Unfortunately, in many employees' eyes, the typical ineptitude of the upper management has damaged what should have been a good gesture. Is it any wonder the staff feels like a kennel full of abused pets, and is it any wonder the only pro-company comment posted here is by someone at the top pretending to be "one of us?"

I applaud the efforts of everyone who contributed or contributes to the charity, and I implore everyone else to do the same. But guilting people into giving money by making them dress differently if they choose not to is unfair and unprofessional. Big surprise, there.

Oh dear cygnites...don't you see this company is the Titanic. It took hours and hours for it to sink but it did sink. The morale is down and not going to get any better. You know what happens at the end of the movie.

As a former employee I can only fathom the idea of being in a company that is ruled by an emperor and makes demands like the onesthat have been made thus far.

WOW after reading all the comments, if you are that unhappy then LOOK for something else. I found a great job after leaving. We all know "little man mack" paid WAY too much for this thing and now they are trying to make cuts everywhere to make up for lost dollars. If it sells it will sell at the bargain basement price, but who will buy it then. The advertisers and competition have got to be eating this up with a silver spoon. I guarantee it!